First quarter growth revised downward to anemic 1.8%
The Obama Recovery continues to impress - with how pathetically weak it is.
The U.S. economy struggled even more than originally thought in the first three months of the year, growing at an anemic 1.8% annual rate, the Commerce Department said Wednesday.
The growth rate has been revised down twice after the initial reading of 2.5% growth in the first quarter.
Growth is widely expected to pick up in the second quarter as consumers and businesses adjust to tax hikes and federal spending cuts this year.
The 1.8% rate was an improvement over the 0.4% rate in the fourth quarter of last year, but well short of what's needed to bring the still-high unemployment rate down significantly.
The drop from the earlier estimates was driven largely by less consumer spending than initially calculated.
In its May estimate of economic growth, the Commerce Department said consumer spending was up 3.4% in the first quarter. On Wednesday, that figure was revised down to 2.6%.
Business investment also was down sharply. It increased 0.4% in the first quarter, down from an earlier estimate of a 2.2% increase.
The only question is how could the Commerce Department have been so far off in their estimates? A revision downward to 1.8% from 2.5% is significant, not to mention the business spending number that started off at a fairly robust 2.2% only to disappear to 0.4%.
Time to rethink their models. Obviously the Obama economy is throwing all their estimates out the window.